600,000 may quit health insurance

MORE than 600,000 Victorians may quit private health cover,
putting more pressure on public hospitals, if the state returns to
the participation rate that existed before the Medicare surcharge
was introduced.

The Federal Government was under fire yesterday for its decision
to lift the income threshold at which the surcharge applied, from
$50,000 to $100,000 for singles.

The private health insurance industry accused Prime Minister
Kevin Rudd of reneging on a promise made days before the federal
election to maintain the surcharge.

Mr Rudd had used weasel words to hide his true intentions,
Australia Health Insurance Association chief executive Michael
Armitage said. He said lifting the surcharge threshold was differ-
ent to maintaining it in most people's eyes.

Dr Armitage estimated that even after a $600 million budget
injection into surgery waiting lists, public hospitals would be $43
million a year worse off. Premiums would increase for those who
stuck with private insurance, he said.

Others predicted little immediate extra load on the public
health system, because those likely to lead the charge out of
insurance would be young, healthy professionals.

But AMA president Rosanna Capolingua said it could be a signal
to Australians that they could drop their private health insurance
or not buy it in the first place.

It would lead to longer waits for elective surgery and other
treatment.

"Those people who genuinely cannot afford (hospital cover) will
actually be pushed further down elective surgery waiting lists,"
she said.

At the end of last year 2.26 million Victorians had hospital
cover. In 1997, when the 1% surcharge was introduced, 31% of
Victorians had hospital cover. With the introduction of lifetime
health cover in 2000 it increased to 42%.

If Victoria returned to the pre-surcharge level, more than
600,000 people would leave private insurance.